Asian stocks rose to a fresh seven-week high on Thursday, lifted by encouraging early results from a COVID-19 treatment trial, though bonds and currencies held cautious ranges ahead of a European Central Bank meeting later in the day.
Anthony Fauci, the top U.S. infectious disease official, said Gilead’s antiviral remdesivir will become the standard of care for COVID-19 after early results from a trial seemed to show it helped speed recovery.
The news rallied Wall Street on Wednesday and lifted MSCI’s broadest index of Asia-Pacific shares, excluding Japan, by 0.8% to its highest since mid-March.
Japan’s Nikkei, returning from a holiday on Wednesday, jumped 2.5% to a seven-week high as well, catching up on the week’s gains. More caution was evident in other asset classes, with the U.S. dollar firm and U.S. futures steady.
“Any positive medical development is helpful,” said Westpac FX analyst Sean Callow.
“But no-one should be counting on a major breakthrough – the key for markets is control of the spread of the virus,” he said, another front where there are positive signs.
“I think it is reasonable for markets to be less bearish than they were in mid-March…but it’s far too early for a sustained rally in risk appetite, so we’re probably due for a little bit of a pullback.”
Futures for Wall Street’s S&P 500 handed back early gains to turn flat and the dollar held its own against the risk-sensitive Antipodean currencies – rising for the first time in a week against the Aussie and kiwi.
The yield on benchmark U.S. 10-year Treasuries stayed parked at 0.6237%, after the U.S. Federal Reserve left interest rates near zero and gave no indication of lifting them any time soon.
Australia’s ASX 200 rose 1.4%. The Shanghai Composite rose 1%. Markets in Hong Kong and South Korea were closed for public holidays.